4/14/2003 @ 12:00AM

Wider-Fi

A little-known standard called Wi-Fi turned into the hottest technology of the year and shook the wireless industry to its core. Now its successors hope to leave Wi-Fi in the dust.

That sound you hear, that incessant tapping on laptops at the corner cafe, the local park and the airport lounge, is music to the ears of the beleaguered tech industry. Wi-Fi, the magical wireless link that lets all those tappers blast data short distances at 200 times the speed of a dial-up modem for no extra cost, has turned into the only bright note punctuating Silicon Valley’s indigo mood. Only three years old, Wi-Fi, a once-obscure wireless standard with the ungainly real name of IEEE 802.11, went supernova last year, selling 18 million connections–one of the fastest adoption rates of any consumer technology in history. Tens of thousands of Wi-Fi “hotspots” have sprouted around the country. Some McDonald’s now offer a free link with the purchase of a combo meal. In March Intel kicked off a $300 million-plus marketing blitz for a new brand, Centrino, that packages together a new laptop microprocessor with a Wi-Fi receiver.

Now it looks like history may repeat itself. In January the industry group that spawned Wi-Fi released a new standard that may put the old one to shame. It extends the wireless range of Wi-Fi from roughly 300 feet to several miles and lets signals bounce around obstacles and penetrate walls; it also fixes security flaws and adds high-quality phone calls. This new standard is dubbed 802.16a by the
Institute of Electrical & Electronics Engineers
, which disdains catchy names. Some are calling it Wi-Max, but a better tag might be Wider-Fi. Meanwhile, a rival group at IEEE is working on 802.20–a kind of Mobile-Fi that promises speedy links in cars and trains traveling at speeds that can exceed 120 miles an hour.

Some fledglings already are turning it into a business.
Intel
, looking to juice its stagnant PC business, is pumping $150 million into wireless investments. Smaller companies such as
Proxim
and
Ensemble Communications
are working on Wider-Fi gear, as is tech heavyweight
Nokia
.
Flarion
, a Cisco-backed startup, is selling equipment that it hopes will form the basis of the upcoming Mobile-Fi standard. The company is running two trials in South Korea, where new broadband gear is deployed first and fastest.

The
Federal Communications Commission
is going all out to clear the way for longer-range wireless networks. Last month it began a proceeding to open up more airwaves for city-spanning wireless webs by loosening restrictions on spectrum now held by
Sprint
, WorldCom, the Catholic Church and universities. “The opportunity is monumental,” FCC Chairman
Michael Powell
said in announcing the push.

Wider-Fi networks pose a grave threat to the cell phone industry, which aims to blanket the country with wireless Web access by upgrading networks to higher-speed 3G, or third-generation, technology. Backers of 3G grudgingly accept that Wi-Fi is much more effective at short ranges. Last month Verizon Wireless announced a plan to use Wi-Fi to supplement its voice and data network coverage, following similar moves by T-Mobile and AT&T Wireless.

The value of cell phone companies’ spectrum licenses could plummet if competitors successfully use other newly deregulated airwaves to offer Wider-Fi and beyond. Verizon values its licensed spectrum at $40 billion on its balance sheet,
AT&T Wireless
at $14 billion and Cingular at $7 billion.

“The wireless industry has paid billions of dollars to the government to acquire spectrum,” Thomas Wheeler, head of the industry’s main trade group, said in a recent letter to Congress. “We were perplexed and concerned [by] the suggestion that additional unlicensed spectrum should be given away for free to other commercial entities so that they may offer the same or similar commercial services.” (Weakening that argument: The industry itself received a quarter of its spectrum free over a decade ago.)

Wider-Fi also could give local phone companies and cable operators night sweats, allowing wireless Internet service providers to cheaply hook up homes at broadband speeds. The same Wider-Fi link could also replace a phone line, since the standard is engineered to provide landline voice quality.

And Wider-Fi can slash the single biggest cost of deployment: access charges for linking a tiny hotspot to a local phone or cable network. A high-frequency version of Wider-Fi would allow entrepreneurs to blast a narrow, data-rich beam between antennas miles apart. It’s the same idea that Teligent and Winstar tried in the late 1990s, only to spend billions before going bankrupt.

The cellular carriers and telcos say Wider-Fi and Mobile-Fi, like earlier efforts, are overhyped. Cellular networks, they argue, will grab the market first. “I don’t think there is a successor technology to Wi-Fi that will be commercially viable for the next three, four or five years,” says
Richard Lynch
, chief technical officer at
Verizon Wireless
.

He also doubts that the Wi-Fi model, which relies on unlicensed airwaves open to all users, can be easily expanded to cover larger areas. Today Wi-Fi avoids overcrowding its airwaves thanks to FCC regulations that keep power levels low and thus shorten the range of Wi-Fi signals. Five Wi-Fi users sitting in a small park can share the same hotspot without clogging it up. Since their low-power signals quickly die out, another group a few blocks away can reuse the same airwaves. If lots of people start running long-range networks in the same area, traffic jams could bog down the service.

But
Roger Marks
, who headed the IEEE standards group for Wider-Fi, and the rest of the 802 crowd are confident they can surmount the problems that have plagued earlier long-distance wireless efforts. The new efforts take advantage of the breathtaking pace of advances in wireless technology, driven by superfast, supercheap chips. For the first century after their invention in 1895, radio receivers were dumb, all-analog gadgets. Progress was glacial. A radio from 1990 was little different from one in 1950. But the second century of radio is proving to be far more innovative, disruptive and fast-moving.

Radios have all gone digital, and they now decipher radio waves using signal-processing chips. As a result, wireless technology travels the same bracing ascent as Moore’s Law, the principle that has prodded the computer industry ever onward since the early 1970s. Each new generation of faster, denser chips can decipher signals that were too faint or too jumbled for previous receivers to parse. They’re also cheaper, smaller, less power-hungry and have longer range. In the late 1990s, as digital cell phones rolled out, capacity leapt sixfold. Newer digital phones have since doubled capacity several more times, helping drive down the per-minute price of a cell phone call from 50 cents to under a dime. The Wi-Fi-type standards take several leaps further and now match the speeds of many wired networks.

The FCC’s Powell is staying neutral in the fight over whether to go all-unlicensed, working mainly to open up large chunks of radio spectrum for all comers. (Double the megahertz of spectrum a wireless network can use and you double its capacity.) Inspired by the success of Wi-Fi, the FCC plans to open up a huge swath for unlicensed use, a whopping 255 megahertz, bringing the unlicensed total to 664 megahertz. By comparison, the early version of Wi-Fi ran on just 83 megahertz. “That’s a carload of spectrum,” gushes Edmond Thomas, head of the FCC’s Office of Engineering & Technology.

The FCC, traditionally swayed by incumbent broadcasters looking to shut the door on competition, is finally acting more interested in giving all sorts of technology access to the skies. Says the agency’s Thomas: “The last thing we ever want to do is pick specific technologies. We believe in the market doing that.”